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House member asks FCC to delay vote on aAT&T/T-Mobile deal, as merger partners respond to DOJ complaint

As AT&T and T-Mobile USA filed their first official response to the Department of Justice (DOJ) antitrust suit against their $39 billion merger, a Democratic member of the House of Representatives urged the FCC to refrain from acting on the companies’ transfer of control application until the DOJ’s pending legal complaint is resolved. In a letter delivered on Monday, John Yarmuth (D-KY), a member of the House Committee on Oversight and Government Reform, told FCC Chairman Julius Genachowski that “while I do not believe it is the appropriate role for a member of Congress to encourage the approval or disapproval of a particular merger, I believe it is in the interest of our economy to allow the [DOJ] and AT&T time to reach a possible settlement that balances the concerns about competition in the wireless market with the potential benefits of job creation and capital investment.” Observing that “both parties, as well as the U.S. District judge, are seeking to resolve the matter expeditiously,” Yarmuth asserted that “the Commission can properly delay any decision it may issue until the judicial process has concluded.” Meanwhile, in its initial response to the DOJ antitrust complaint, AT&T told the U.S. District Court for the District of Columbia last Friday that the DOJ lawsuit overlooks the “efficiencies” that AT&T’s acquisition of T-Mobile will create as well as the vigorous competition that characterizes the U.S. wireless market. Taking issue with the DOJ’s claim that the proposed transaction will remove T-Mobile as a “significant competitive force” that provides “the value option for wireless services,” AT&T countered that, “rather than substantially reducing competition, the combined firm will usher in more intense competition to an already vibrantly competitive market.” Adding that the DOJ complaint “largely ignores the significant competition from established providers such as Verizon Wireless and Sprint, innovative upstarts such as MetroPCS and Leap/Cricket, and strong regional providers like U.S. Cellular,” AT&T proclaimed that the DOJ “does not and cannot explain how. . . the combined AT&T/T-Mobile will have any ability or incentive to restrict output, raise prices, or slow innovation” or “how T-Mobile, the only major carrier to have actually lost subscribers in a robustly growing market, provides a unique competitive constraint on AT&T.” Asserting that AT&T’s reply “does not change the facts,” a spokesman for Sprint Nextel, which filed its own court challenge against the merger last week, maintained its stance that the deal will “create a clear wireless duopoly that could raise prices, stifle innovation, and cost American jobs.”

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